Schwab Intelligent Portfolio or Vanguard Target Fund?

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ACJC
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Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by ACJC » Mon Nov 13, 2017 5:01 pm

I switched my rollover IRA from Morgan Stanley to Schwab. Schwab was helpful in helping me transition the account and decide where to move the accounts. I feel like I moved too quickly ans feeling more confident. I am now wondering if I should move all accounts to Vanguard? We also have a Roth IRA and 2 custodial accounts under the 3000.00 requirement for Vanguard. I also have a taxable account of 5000.00 we moved into the intelligent portfolio. I was think of moving this to a Vanguard Life Strategy fund? Or just to VTSAX? Thank you all for your advice, understanding and helping newbies!

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Sandtrap
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by Sandtrap » Mon Nov 13, 2017 5:50 pm

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Some helpful links:
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Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
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https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives
https://www.bogleheads.org/wiki/Invest ... statement
Outline of Investing
https://www.bogleheads.org/wiki/Outline_of_investing
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
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https://www.bogleheads.org/wiki/What_ ... investing
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Nate79
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by Nate79 » Mon Nov 13, 2017 5:55 pm

There was two recent threads on robo advisors, one on thr details and one on backtesting. I would suggest to search these out and revuee them. Based on that info Schwab looked very interesting to me so we have been transitioning some money to them for evaluation along with using their excellent checking services.

pkcrafter
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by pkcrafter » Mon Nov 13, 2017 6:15 pm

ACJC, Schwab offers some very low cost index funds, so you could just switch out of the Robo service and stay right there.

https://www.schwab.com/public/schwab/in ... uity/index

Consider all accounts as parts of one, single portfolio. That will help avoid duplication and keep things simple.



Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

tanstaafl
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by tanstaafl » Mon Nov 13, 2017 7:42 pm

You don’t need to choose between Schwab’s intelligent portfolios and Vanguard’s target funds. Schwab has fantastic target index funds that run 8bp, regardless of your contribution. That’s what I chose, and what I’d recommend.

ACJC
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by ACJC » Mon Nov 13, 2017 10:14 pm

Thank you all for the good advice. I read the information on robo’s and SIP. Due to my age and the threads I tried to keep the cash to a minimum (7%). I guess this shows there a many ways to invest. I am 38 years and wonder if Vanguard would be better?

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in_reality
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by in_reality » Tue Nov 14, 2017 5:22 am

ACJC wrote:
Mon Nov 13, 2017 10:14 pm
Thank you all for the good advice. I read the information on robo’s and SIP. Due to my age and the threads I tried to keep the cash to a minimum (7%). I guess this shows there a many ways to invest. I am 38 years and wonder if Vanguard would be better?
I don't think there is anyway to know for sure in advance which will do better.

Many here advocate a small value tilt. The SIP has that. It also has inflation protection in precious metals built in. (of course that protection could be a little bit of a drag too).

Some prefer Vanguard value funds to Schwab, but I personally am happy with the methodology in the Schwab funds. It's less of a sector bet.

In any case, here is a calculator to figure out the Schwab market cap ETFs if you decided to go that route. https://docs.google.com/spreadsheets/d/ ... =842559917

As for SIP vs Vanguard Target Date vs Schwab Target Date vs three fund, I think it's nice to imagine that if we make the perfect choice, that we can work less hard. I think though those are all good choices and there isn't a way to know in advance which will do the best. I don't wouldn't expect huge differences in them.

People make a big deal of the cash drag on the Schwab SIP and it should be considered, still the Vanguard robo (PAS) and Target Date funds use hedged international bonds which I suspect might have a drag too since the hedge return is based on one month rates. If the US has a higher return at 10 years than international bonds, you won't be receiving the term premium. I think maybe they are expecting some of the hedged international bonds to have a steeper yield curve to balance off countries with a lower curve, but since it's generally developed Europe, I don't see growth outstripping the US and I don't see Germany relenting on holding inflation low. Hedge international bonds have done well in recent yields and they got a NAV boost from the move to strong negative rates, but going forward I wonder if the returns would be the same or if international bonds would really provide inflation protection. Vanguard is saying it will because different countries will experience different rates but I also wonder maybe if when inflation hits, it will be more global since it's a global economy. I mean the percent of countries in recession today is at a historic low and if all countries keep growing, sooner or later there might not be any place that offers super cheap wages to offset rising costs. In that sense, I think maybe Schwab's SIP plan is a little more stable under that scenerio.

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ruralavalon
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by ruralavalon » Tue Nov 14, 2017 9:16 am

pkcrafter wrote:
Mon Nov 13, 2017 6:15 pm
ACJC, Schwab offers some very low cost index funds, so you could just switch out of the Robo service and stay right there.

https://www.schwab.com/public/schwab/in ... uity/index

Consider all accounts as parts of one, single portfolio. That will help avoid duplication and keep things simple.



Paul
ACJC I think that doing it yourself and using either Schwab index funds in Schwab accounts, or using Vanguard accounts with Vanguard index funds, would be a better idea.

I am always very skeptical about any service advertised as free. Who actually provides services for free other than religious institutions and charities?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

ACJC
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by ACJC » Tue Nov 14, 2017 8:36 pm

in_reality wrote:
Tue Nov 14, 2017 5:22 am
ACJC wrote:
Mon Nov 13, 2017 10:14 pm
Thank you all for the good advice. I read the information on robo’s and SIP. Due to my age and the threads I tried to keep the cash to a minimum (7%). I guess this shows there a many ways to invest. I am 38 years and wonder if Vanguard would be better?
I don't think there is anyway to know for sure in advance which will do better.

Many here advocate a small value tilt. The SIP has that. It also has inflation protection in precious metals built in. (of course that protection could be a little bit of a drag too).

Some prefer Vanguard value funds to Schwab, but I personally am happy with the methodology in the Schwab funds. It's less of a sector bet.

In any case, here is a calculator to figure out the Schwab market cap ETFs if you decided to go that route. https://docs.google.com/spreadsheets/d/ ... =842559917

As for SIP vs Vanguard Target Date vs Schwab Target Date vs three fund, I think it's nice to imagine that if we make the perfect choice, that we can work less hard. I think though those are all good choices and there isn't a way to know in advance which will do the best. I don't wouldn't expect huge differences in them.

People make a big deal of the cash drag on the Schwab SIP and it should be considered, still the Vanguard robo (PAS) and Target Date funds use hedged international bonds which I suspect might have a drag too since the hedge return is based on one month rates. If the US has a higher return at 10 years than international bonds, you won't be receiving the term premium. I think maybe they are expecting some of the hedged international bonds to have a steeper yield curve to balance off countries with a lower curve, but since it's generally developed Europe, I don't see growth outstripping the US and I don't see Germany relenting on holding inflation low. Hedge international bonds have done well in recent yields and they got a NAV boost from the move to strong negative rates, but going forward I wonder if the returns would be the same or if international bonds would really provide inflation protection. Vanguard is saying it will because different countries will experience different rates but I also wonder maybe if when inflation hits, it will be more global since it's a global economy. I mean the percent of countries in recession today is at a historic low and if all countries keep growing, sooner or later there might not be any place that offers super cheap wages to offset rising costs. In that sense, I think maybe Schwab's SIP plan is a little more stable under that scenerio.
Thank you! This makes me feeel better. I guess we all wish we could see the future.

ACJC
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Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by ACJC » Tue Nov 14, 2017 8:36 pm

ruralavalon wrote:
Tue Nov 14, 2017 9:16 am
pkcrafter wrote:
Mon Nov 13, 2017 6:15 pm
ACJC, Schwab offers some very low cost index funds, so you could just switch out of the Robo service and stay right there.

https://www.schwab.com/public/schwab/in ... uity/index

Consider all accounts as parts of one, single portfolio. That will help avoid duplication and keep things simple.



Paul
ACJC I think that doing it yourself and using either Schwab index funds in Schwab accounts, or using Vanguard accounts with Vanguard index funds, would be a better idea.

I am always very skeptical about any service advertised as free. Who actually provides services for free other than religious institutions and charities?
Thank you still trying to read as much as possible about educating myself.

billthecat
Posts: 106
Joined: Tue Jan 24, 2017 2:50 pm

Re: Schwab Intelligent Portfolio or Vanguard Target Fund?

Post by billthecat » Tue Nov 14, 2017 11:11 pm

i do both. SIP in my taxable account, target date fund in my tax-advantaged accounts.

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